Montrose Environmental Group Inc., which works to curb water, soil and air pollution and contamination, says it will benefit from an increase in U.S. industrial business despite initial concerns about President Donald Trump’s new administration.
“The current increase in U.S. industrial activity and shifts in regulatory policies have created more tailwinds than headwinds for Montrose,” company CEO Vijay Manthripragada told the Business Journal.
When Trump last year campaigned on a platform of virulent climate-change skepticism and opposition to government regulations, Wall Street sent Montrose’ shares down about 80% from about $50 to an all-time low in April of $10.51.
Since then, the shares have almost tripled to about $27.85 as of press time with a market cap approximately $1 billion (NYSE: MEG).
The share price was boosted on Aug. 7 when Montrose reported second-quarter revenue of $234.5 million, up 35% from the same period a year earlier. Net income surged to $18.4 million, jumping from a $10.2 million loss a year earlier.
Full-year guidance was increased to revenue in the range from $795 million to $835 million, representing 17% growth at the midpoint compared to full-year 2024. That is almost twice the 9.2% midpoint that the company originally predicted in February for 2025.
OC Base for Top Execs
Manthripragada previously served as CEO of PetCareRx Inc., a high-growth e-commerce company in the pet health industry and was a senior vice president in the investment banking division of Goldman Sachs.
In 2015, he joined Montrose as president and a year later as its CEO. He grew it through more than 50 acquisitions and took the company public in 2020. On its first day as a publicly traded company, the shares, initially priced at $15 each, soared 47%.
Last year, after the company made six acquisitions, it announced a pause to focus on organic growth. While it hasn’t announced any new purchases this year, Manthripragada said: “Acquisitions continue to be a key part of our growth strategy.
We continually evaluate companies that can complement and expand our existing services and expertise.”
While the company in 2021 officially moved its headquarters from Irvine to North Little Rock, Ark., CEO Manthripragada, CFO Allan Dicks, General Counsel Nasym Afsari and other top-ranking Montrose executives are based in Orange County, according to their LinkedIn profiles. Dicks in 2019 won a Business Journal CFO Award for the public sector.
“The work we do, focused on clean air, water and soil, has repeatedly proven to be insulated from economic and political cycles,” Manthripragada told the Business Journal on Sept. 11 in written responses to a series of questions.
Administrator Lee Zeldin’s regulatory rollbacks at the U.S. Environmental Protection Agency (EPA) announced in early 2025 caused pressure on the share price.
Even Trump’s various tariff announcements hit the company, despite the levies having no direct connection to Montrose’s environmental business.
Share Price Hits From Outside
“Simply put, the share price headwinds seemed predominantly exogenous, and I say that because our share price experienced sudden drops despite Montrose having raised guidance, no news on company performance and no changes to outlook,” he said.
Wall Street reaction to the earnings released on Aug. 7 has been generally positive, with Needham Co.’s Jim Ricchiuti saying, “the underlying Montrose business is very healthy.”
300 OC Employees, 6,300 Clients
The company has about 3,500 employees worldwide today with over 300 in Orange County.
It has about 6,300 clients, ranging from governments to gas companies to utilities.
Among its recent wins, Montrose said Sept. 9 it is currently engaged in more than 30 projects nationwide to help chemical manufacturers prepare for an upcoming federal air pollution rule, known by the acronym HON MACT.
With less than a year remaining for implementation, Montrose says it’s helping clients navigate complex requirements set by the EPA and avoid costly delays.
“Clients around the world rely on us to navigate complex environmental regulations and achieve stewardship or compliance goals,” said Manthripragada, who holds a bachelor’s in science from Duke University and Oxford University and an MBA from the Wharton School.
Its units provide services such as treating contaminated water, permitting work for large infrastructure projects, finding ways to reduce the carbon intensity of operations and converting waste to renewable energy.
Environmental Responsibility
Manthripragada’s message to government officials is clear:
“Environmental stewardship, economic development and human progress do not have to be opposing forces; they’re fundamentally connected and need to be addressed. Montrose works in communities across the political spectrum and we repeatedly find that all of us share much more in common than not.
“Our work is evidence that the desire for clean air, water and soil is universal, even if there are differences in opinion on how best to get there. Our engagement with the Administration, members of Congress and Governors from both sides of the aisle remains very constructive.
“In 2025, we’re exceeding our goals for revenue growth, earnings growth and cash flow, and we’ve raised our full-year guidance given our confident outlook for the remainder of the year,” the Montrose CEO said.
Thumbs Up for Montrose from Analysts
Here is a sampling of analysts’ reaction to latest Montrose earnings of Aug. 7 and related developments.
Clear Street LLC/Tim Moore
Clear Street’s analysis emphasized Montrose’s “uniqueness as a pure-play environmental services and technology company, which is one of the few, if any public companies, offering its customers the combination of environmental consulting, testing and treatment as a one-stop shop for air, water and soil.”
Needham/Jim Ricchiuti
“MEG’s impressive Q2 report should go a long way toward addressing lingering investor questions about growth and profitability. Q2 revenues increased 36%, well above Street expectations of +9%, while adj. EBITDA came in 45% above consensus estimates, climbing 70% y/o/y vs. consensus +18%. Much of the upside was driven by stronger emergency response business, but the underlying Montrose business is very healthy, as evidenced by management’s confident tone in the call yesterday (Aug. 7).”
Bank of America Securities/Andrew Obin
“We raise our adj. EBITDA to $116mn from $107mn. This compares to $111-117mn guidance. We forecast revenue to grow 18% y/y organic with 3.5pts from already completed acquisitions to $821mn. This compares to $795-835mn guidance,” Obin wrote on Aug. 8.
He noted that in May the EPA delayed so-called PFAS regulations for public water systems from 2027 to 2029. “We think this has delayed PFAS-related projects. Montrose is outperforming other publicly traded environmental consulting firms which have more exposure to Federal government spending/contracts. 2Q’s 10% y/y organic revenue growth (excluding environmental emergency response revenue) shows Montrose can grow through the delay.”
